By AVCJ Larissa Ku
The contribution CDH Investments has made to China Grand Pharma belies the size of its equity interest in the company. M&A, at home and overseas, has been central to the growth strategy.
Stories of this kind are rooted in the demonstration of value creation. They lend themselves to buyouts where the private equity investor has free rein to replace management and implement its own agenda.
China Grand Pharmaceutical & Healthcare Holdings does not conform to type. It is Hong Kong-listed and CDH Investments holds a 10% stake. Yet the private equity firm might claim to have played a decisive role in the company’s development as collaborator in a string of bolt-on acquisitions that have redefined China Grand. The more than 300% increase in China Grand’s share price since CDH’s investment goes some way to quantifying the value created.
“We see many promising start-ups, but sometimes they don’t fit our investment strategy – ticket sizes generally have to be above $50 million – or our risk appetite,” says Minfeng Wu, a managing director at CDH. “When a portfolio company is making investments, there is a completely different mindset. For us, it’s an equity investment. For them, it might be seen as an R&D expense that brings in new talent or product development synergies.”
Read More: https://www.avcj.com/avcj/analysis/3023823/portfolio-cdh-investments-china-grand-pharma
By AVCJ Larissa Ku
The contribution CDH Investments has made to China Grand Pharma belies the size of its equity interest in the company. M&A, at home and overseas, has been central to the growth strategy.
Stories of this kind are rooted in the demonstration of value creation. They lend themselves to buyouts where the private equity investor has free rein to replace management and implement its own agenda.
China Grand Pharmaceutical & Healthcare Holdings does not conform to type. It is Hong Kong-listed and CDH Investments holds a 10% stake. Yet the private equity firm might claim to have played a decisive role in the company’s development as collaborator in a string of bolt-on acquisitions that have redefined China Grand. The more than 300% increase in China Grand’s share price since CDH’s investment goes some way to quantifying the value created.
“We see many promising start-ups, but sometimes they don’t fit our investment strategy – ticket sizes generally have to be above $50 million – or our risk appetite,” says Minfeng Wu, a managing director at CDH. “When a portfolio company is making investments, there is a completely different mindset. For us, it’s an equity investment. For them, it might be seen as an R&D expense that brings in new talent or product development synergies.”
Read More: https://www.avcj.com/avcj/analysis/3023823/portfolio-cdh-investments-china-grand-pharma